Despite the cost of living crisis, balances with utilities are £5bn higher than in April 2022 due to customers’ reduced consumption.

Despite a cost-of-living crisis that has forced some households to choose between heating and feeding, energy providers are hoarding nearly £7 billion in customer funds.

More than 16 million British households owe a total of £6.7 billion to their suppliers, with half owing more than £200.

According to the study, the combination of mild winter weather and increased consumer efforts to reduce energy consumption has resulted in companies possessing £5bn more in credit than last year.

Typically, energy customers with direct debits will accumulate credit during the summer when consumption is low, and suppliers will deplete that credit during the winter when consumption is higher.

Nevertheless, consumers have complained that energy companies withhold hundreds of pounds from them this winter.

The practice threatens to strain budgets already strained by the cost of living crisis and tarnish the reputation of an industry that has endured nearly 30 fatalities since the onset of the energy crisis in 2021.

Energy companies consider wholesale prices and consumers’ historical utilisation to calculate annual bills and establish monthly payments.

The Uswitch study revealed that the number of households in credit had increased by 5 million since April 2022, when 11 million households were in credit, and that more than eight million billpayers are now more than £200 in credit.

The number of consumers with debt decreased from six million to four million, with the total quantity of debt owed decreased from £1.2 billion to £920 million. 

However, the average sum owed by indebted households has increased from £188 to £234.

The Uswitch study revealed that Plymouth customers had the highest credit balance, at £603, while Norwich customers had the highest average debt, at £348. At 19%, Leeds had the highest proportion of households with utility debt.

Although consumers can request the return of funds held by their energy provider, only 14% said they intended to do so. Over half intend to leave the funds with their supplier to receive future bill discounts.

Richard Neudegg, at Uswitch.com, stated, “This level of credit suggests that energy-saving awareness campaigns and cost-of-living support played a role in protecting consumers from an even more challenging winter.”

“It may also raise the question of whether direct debits set by suppliers in response to the energy price increases were significantly higher than necessary.

“Normally, we would expect people to emerge from winter with little credit balances, but many households have weathered the storm, leaving suppliers with nearly £7 billion in credit balances.”

Neudegg remarked that while wholesale prices have decreased since December, meaning that bills should shortly begin to decline, they will still be above historical norms.

In 2021, gas and electricity bills began to increase, and they skyrocketed in 2022 as the conflict in Ukraine caused a surge in wholesale energy prices. 

The government intervened last autumn to mitigate the worst of the effects by subsidising energy bills via programmes administered by energy providers.

The new research could reignite a debate within the industry regarding whether customer deposits should be segregated. 

Ofgem, the energy regulator, accused suppliers of using customers “like an interest-free company credit card” but later refrained from mandating complete ringfencing.